Colombia’s central bank has again held its policy rate at 4.5%, citing the continuing uncertainty in the global markets. However, it left the door open for possible hikes in the event sentiment turns. “If international confidence begins to return and if the domestic indicators continue their current dynamism and don’t demonstrate contagion from the external situation, it is probable that the economy would require less economic stimulus,” it says.
Category: Regions
Posted inDaily Brief
TNK-BP to Build LatAm Presence
The Anglo-Russian oil company TNK-BP is close to expanding its footprint in the Latin American oil business by acquiring a 45% stake in Brazilian oil company HRT. Talk of the deal led HRT shares to climb in the Bovespa late last week, as the market expects a $1bn deal to be announced in early November. Officials at HRT declined to offer any specifics but said an announcement “will happen in days”. The deal is expected to give TNK-BP access to a 21-block exploration effort in the Amazon’s Solimoes basin. The area is not considered the most attractive oil real estate in Brazil, but it gives TNK-BP a foothold in a new oil frontier. The oil company, a 50/50 venture with the UK’s BP and a handful of Russian tycoons, already owns a 16.7% equity stake in Venezuela’s Petromonagas heavy oil venture and minority stakes in two other projects – all of it in partnership with Venezuela’s state-owned oil company PDVSA.
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BCP Completes Local Placement
Banco de Credito del Peru (BCP) has sold PES120m ($44m) in domestic bonds. The 5-year bonds pay 6.21%. BCP’s own brokerage managed the deal.
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Banobras to Raise MXP
Banobras plans to issue up to MXP5bn ($381m) in bonds in the Mexican domestic market next month. The Mexican development bank is able to issue a 4-year floater, 10-year fixed-rate bonds, and 10-year UDI-denominated notes. November 9 is the estimated issuance date, according to a banker on the deal. Bank of America Merrill Lynch and Banamex are managing the sale, rated Aaa on a national scale. Banobras last issued in the local market in 2010 via Banamex, when it sold MXP7bn in 4-year bonds after generating some MXP19bn in demand. Banobras promotes and finances infrastructure projects and public services, mainly, through sub-national government lending and project finance.
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Argos to Sell Non-Core Assets
Cementos Argos, Colombia’s largest cement maker, has agreed to sell a number of non-core assets to its parent company, Inversiones Argos, in exchange for newly-issued Inversiones Argos preferred shares. Shareholders of Cementos Argos are to receive 0.31 of a preferred share of the parent company for each share they own of the cement subsidiary. The assets involved in the exchange include equity investments in Bancolombia, Grupo de Inversiones Suramericana and Grupo Nutresa, as well as port terminals in Tolu and Barranquilla, the ‘Bijao’ coal mine, and assorted real estate in several Colombian states. Cementos Argos officials said the company initially sought to sell the assets to a third party but ultimately decided on this approach. Credit Suisse advised Cementos Argos, while BNP Paribas served as an advisor to its parent company. Bankers involved in the deal and Cementos Argos officials declined to put a value on the transaction since there are no preferred shares of Inversiones Argos in circulation. Dealogic estimated the deal at $1.277bn, using Oct 25 prices for Inversiones Argos’ ordinary shares. The cement producer said the transaction will not affect its Ebitda generation, 94% of which comes from cement production activities. The move comes as Cementos Argos seeks to focus on its core cement business and is eyeing an eventual ADR listing on the NYSE.
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Unifin Preps Domestic ABS
Mexico’s Unifin Financiera is preparing to sell up to MXP800m ($61m) in asset-backed bonds in the domestic market next month. This amount represents an increase from the originally planned MXP400m. The 5-year floater will pay a spread over TIIE. Pricing is expected November 8. IXE is leading the transaction, rated AAA on a national scale. It last issued a MXP300m 5-year in June 2010.
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Bancolombia Set for Local Bond
Bancolombia is preparing to raise COP600bn ($323m) in Colombia’s local bond market on November 2, according to a banker on the deal. Terms have not been set, but the issuer will be able to choose among maturities of 2-15 years, with pricing to be set over the IPC and the DTF rate. Bancolombia is self-leading the deal, rated AAA on a national scale.
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EEB FO Fills Book, Set to Upsize
Empresa de Energia de Bogota’s COP700bn ($376m) equity follow-on has seen orders of 1.3 times that amount after books were recently closed. The utility is expected to upsize the deal to about COP770bn, according to a person familiar with the transaction. The Colombian utility offered 538.5m shares at COP1,300 each. EEB plans to use the proceeds to fund its expansion plans. Corredores Asociados is lead manager. EEB Shares closed Friday at COP1,325.
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Sura Set to Test Colombia ECM Mettle
With follow-ons from blue chips such as Empresa de Energia de Bogota and Davivienda filling their books, Colombia’s equity market is set be tested with a large deal from Colombia’s Grupo de Inversiones Suramericana. The financial conglomerate has filed to sell 120m shares, which would raise COP4.07trn ($2.19bn) at Friday’s COP33,900 closing price. Details on sale price and opening date for the offer could be announced as soon as today. The challenge, local bankers say, will be offering buyers enough of a discount while still reaching the large size the company needs to help fund the EUR2.615bn ($3.76bn) acquisition of ING’s LatAm pension fund and insurance assets agreed earlier this year. “It’s a great company, but a tricky equity story,” says a banker away from the deal. Sura will sell non-voting preferred shares paying a 3% dividend, which bankers say may also represent a challenge given the deal’s large size. A series of well-received follow-on sales in the Andean nation at a time when other countries remain shut to new issuance suggests there is appetite for high-quality Colombian issuers. Sura CFO Andres Bernal Correa told LatinFinance in August that BBVA, Deutsche Bank, HSBC, JPMorgan, Santander and UBS and Corredores Asociados had been hired to lead the deal, a third of which was expected to go to international investors.
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BB Preps China Ops
Banco do Brasil has received approval from Brazil’s central bank to conduct commercial banking operations in China, according to a bank official, and is awaiting a license from Chinese regulators. BB would be the first Latin American bank to operate in China.